<PAGE>
Portfolio Manager's Letter
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Dear Investor:
U.S. economic growth slowed during the first six months of 1995. In
response to the Federal Reserve's tightening of monetary policy,
economic growth downshifted from an unsustainable 5.1% fourth quarter
pace to a more moderate 2.7% rate in the first quarter of 1995. By
Spring, the financial markets began to anticipate an end to the Federal
Reserve's interest rate hikes. The economic crisis in Mexico, higher
individual tax payments and excessive business inventories further
dampened the U.S. economy in the second quarter. By June, in a notable
reversal of opinion from six months earlier, the markets began to expect
the Federal Reserve to lower short-term interest rates to insure against
the possibility of a recession.
Slower growth was good news for U.S. financial markets. As inflation
concerns receded, long-term interest rates fell substantially with the
benchmark 30 year U.S. Treasury bond yield declining from 7.88% to
6.62%. The prospect of slower growth spurred broad stock market indices
to numerous new highs as fears of an overheating economy -- and the risk
of further Federal Reserve tightening -- subsided. Stocks also
benefitted from falling interest rates and continued strong earnings
growth. The financial markets, in general, reacted positively to
legislation to eliminate the Federal budget deficit over the next seven
years.
Steadily falling interest rates throughout the first half of the year
positively affected U.S. Treasury STRIPS which represent the majority of
the invested assets in your U.S. Government Plus Fund. Treasury STRIPS,
which are zero coupon bonds, respond more than other bonds to interest
rate movements because they don't pay interest each year. When rates
decline, the prices of zeros rise sharply because holders receive no
income that needs to be reinvested at newer, less attractive levels.
After lagging the general market throughout 1994, the small-cap sector
is finally showing signs of strength. Growth stocks continue to lead
the market as individual companies continue to show consistent earnings
growth despite a slowing economy. For the first half of 1995, First
Investors U.S. Government Plus Fund - 1st Series, 2nd Series and 3rd
Series returned 18.21%, 10.61% and 10.58%, respectively, on a net asset
value basis.
As always we appreciate the opportunity to serve your investment needs.
Sincerely,
(Signature of Patricia D. Poitra)
Patricia D. Poitra
Director of Equities
and Portfolio Manager
July 31, 1995
<PAGE>
Portfolio of Investments
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
June 30, 1995
<TABLE>
<CAPTION>
Principal 1st SERIES 2nd SERIES 3rd SERIES
Amount or
Shares Security Value % Value % Value %
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
$2,625M Treasury STRIPS, due 11/15/2004 $ 1,455,037
3,175M Treasury STRIPS, due 11/15/1999 $ 2,457,767
1,200M Treasury STRIPS, due 11/15/1998 $ 985,080
Total Value of U.S. Government Securities
(cost $1,047,228, $2,251,313 and $926,429,
respectively) 1,455,037 98.8 2,457,767 97.5 985,080 87.6
COMMON STOCKS
Commercial Service
100 *Insurance Auto Auctions, Inc. 2,925
200 *Insurance Auto Auctions, Inc. 5,850
200 *Insurance Auto Auctions, Inc. 5,850
400 *Interpool, Inc. 5,450
2,925 .2 5,850 .2 11,300 1.0
Computers/Software/Business Equipment
100 *Lotus Development Corp. 6,375 .6
Electronics/Semiconductors
160 Motorola, Inc. 10,740
400 Motorola, Inc. 26,850
400 Motorola, Inc. 26,850
10,740 .7 26,850 1.1 26,850 2.4
Financial
378 Southern National Corporation 9,072 .8
Foods
300 Dreyers Grand Ice Cream, Inc. 10,988 1.0
Healthcare/Miscellaneous
200 Fisher Scientific International 6,625 .6
Retail Trade
300 Talbots, Inc. 11,925
300 Talbots, Inc. 11,925
11,925 .5 11,925 1.0
Technology
300 *Integrated Device Technology, Inc. 13,875 1.2
Transportation
700 Transportacion Maritima Mexicana S.A. (ADR) 4,375 .4
Total Value of Common Stocks
(cost $5,373, $21,428 and $64,276 respectively) 13,665 .9 44,625 1.8 101,385 9.0
Total Value of Investments (cost $1,052,601,
$2,272,741 and $990,705, respectively) 1,468,702 99.7 2,502,392 99.3 1,086,465 96.6
Other Assets, Less Liabilities 5,026 .3 17,106 .7 38,125 3.4
Net Assets $ 1,473,728 100.0 $ 2,519,498 100.0 $ 1,124,590 100.0
*Non-income producing
</TABLE>
See notes to financial statemen
<PAGE>
Statement of Assets and Liabilities
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
June 30, 1995
<TABLE>
<CAPTION>
1st Series 2nd Series 3rd Series
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost................................................ $ 1,052,601 $ 2,272,741 $ 990,705
At value (Note 1A)................................................ 1,468,702 2,502,392 1,086,465
Cash................................................................ 5,794 19,230 39,070
Dividends receivable................................................ 16 40 62
Other assets........................................................ 867 932 876
Total Assets........................................................ 1,475,379 2,522,594 1,126,473
Liabilities
Accrued advisory fees............................................... 1,241 2,107 935
Accrued expenses.................................................... 410 989 948
Total Liabilities................................................... 1,651 3,096 1,883
Net Assets.......................................................... $ 1,473,728 $ 2,519,498 $ 1,124,590
Net Assets Consist of:
Capital paid in..................................................... $ 992,341 $ 2,446,498 $ 1,052,431
Undistributed net investment income................................. 41,212 67,531 26,116
Accumulated net realized gain (loss) on investments................. 24,074 ( 224,182) ( 49,717)
Net unrealized appreciation in value of investments................. 416,101 229,651 95,760
Total............................................................... $ 1,473,728 $ 2,519,498 $ 1,124,590
Shares of beneficial interest outstanding (Note 3).................. 126,836 215,792 92,753
Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest outstanding)... $11.62 $11.68 $12.12
Maximum Offering Price Per Share
(Net Asset Value /.92)* ............................................ $12.63 $12.70 $13.17
</TABLE>
*On purchases of $10,000 or more, the sales charge is reduced.
See notes to financial statements
<PAGE>
Statement of Operations
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
1st Series 2nd Series 3rd Series
<S> <C> <C> <C>
Investment Income
Income:
Interest.......................................................... $ 52,420 $ 90,156 $ 35,453
Dividends......................................................... 32 116 246
Total income........................................................ 52,452 90,272 35,699
Expenses (Note 4):
Advisory fees..................................................... 7,025 12,248 5,426
Professional fees................................................. 2,963 4,627 2,048
Shareholder servicing costs....................................... 1,465 3,668 812
Reports and notices to shareholders............................... 468 1,035 383
Custodian fees.................................................... 49 139 50
Other expenses.................................................... 811 1,024 864
Total expenses...................................................... 12,781 22,741 9,583
Less: Expenses assumed............................................ 1,541 --- ---
Expenses-net........................................................ 11,240 22,741 9,583
Net investment income............................................... 41,212 67,531 26,116
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain on investments.................................... 24,074 6,821 7,322
Net unrealized appreciation of investments.......................... 170,607 172,808 75,080
Net gain on investments............................................. 194,681 179,629 82,402
Net Increase in Net Assets Resulting from Operations................ $ 235,893 $ 247,160 $ 108,518
</TABLE>
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
<TABLE>
<CAPTION>
1st Series 2nd Series 3rd Series
1/1/95 to 1/1/94 to 1/1/95 to 1/1/94 to 1/1/95 to 1/1/94 to
6/30/95 12/31/94 6/30/95 12/31/94 6/30/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income........................... $ 41,212 $ 83,432 $ 67,531 $ 137,784 $ 26,116 $ 53,375
Net realized gain on investments................ 24,074 58,651 6,821 24,904 7,322 43,841
Net unrealized appreciation
(depreciation) of investments................ 170,607 ( 323,053) 172,808 ( 349,642) 75,080 ( 165,381)
Net increase (decrease) in net assets
resulting from operations............... 235,893 ( 180,970) 247,160 ( 186,954) 108,518 ( 68,165)
Distributions to Shareholders from:
Net investment income.......................... --- ( 83,432) --- ( 137,784) --- ( 53,375)
Net realized gain from security
transactions................................. --- ( 58,651) --- --- --- ---
Capital surplus................................ --- ( 102) --- ( 1,283) --- ( 1,156)
Total distributions....................... --- ( 142,185) --- ( 139,067) --- ( 54,531)
Trust Share Transactions(a)
Issued......................................... 7,023 498 3,236 19,734 169 3,715
Issued on reinvestments........................ --- 139,960 --- 133,817 --- 52,560
Redeemed....................................... ( 99,315) ( 218,951) ( 90,682) ( 224,200) ( 16,364) ( 159,485)
Net decrease from trust share transactions ( 92,292) ( 78,493) ( 87,446) ( 70,649) ( 16,195) ( 103,210)
Net increase (decrease) in net assets............ 143,601 ( 401,648) 159,714 ( 396,670) 92,323 ( 225,906)
Net Assets
Beginning of period............................ 1,330,127 1,731,775 2,359,784 2,756,454 1,032,267 1,258,173
End of period+................................. $ 1,473,728 $ 1,330,127 $ 2,519,498 $ 2,359,784 $ 1,124,590 $ 1,032,267
+Includes undistributed net investment income of.. $ 41,212 --- $ 67,531 --- $ 26,116 ---
(a)Trust Shares Issued and Redeemed
Issued......................................... 607 41 301 1,527 14 315
Issued on reinvestments........................ --- 14,238 --- 12,861 --- 4,795
Redeemed....................................... ( 9,122) ( 19,122) ( 8,078) ( 19,600) ( 1,452) ( 13,369)
Net decrease in trust Shares.............. ( 8,515) ( 4,843) ( 7,777) ( 5,212) ( 1,438) ( 8,259)
</TABLE>
See notes to financial statements
<PAGE>
Notes to Financial Statements
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
1. Significant Accounting Policies - The Fund is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940 (the
"1940 Act") as a diversified open-end management investment company. The Fund
operates as a series fund, issuing shares of beneficial interest of the 1st, 2nd
and 3rd Series and accounts separately for the assets, liabilities and
operations of each Series.
A. Security Valuation - A security listed or traded on an exchange or the NASDAQ
National Market System is valued at its last sale price on the exchange or the
system where the security is primarily traded. Securities which have no sales on
a particular day and securities traded in the over-the-counter market are valued
at the mean between the last bid and asked prices. The Treasury STRIPS in which
each Series invests are traded primarily in the over-the-counter market. Such
securities are valued at the mean between the last bid and asked prices on that
day as furnished by any dealer who makes a market in such securities. Securities
for which market quotations are not readily available are valued on a consistent
basis at fair value as determined in good faith by methods approved by the
trustees of the Fund.
B. Federal Income Taxes - No provision has been made for federal income taxes on
net income or capital gains, since it is the policy of each Series to continue
to comply with the special provisions of the Internal Revenue Code applicable to
investment companies and to make sufficient distributions of income and capital
gains (in excess of any available capital loss carryovers) to relieve each
Series from all, or substantially all, federal income taxes. At June 30, 1995,
the following Series had capital loss carryovers expiring as follows:
Year of Expiration 2nd SERIES 3rd SERIES
1996 $ 102,432 $ ---
1997 98,768 ---
1998 29,803 41,135
2001 --- 15,904
$ 231,003 $ 57,039
C. Distributions to Shareholders - Distributions to shareholders are declared
and paid annually. Income dividends and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due
to differing treatments for capital loss carryforwards and post October losses.
D. Expense Allocation - Direct expenses attributable to a Series are charged to
and paid from the assets of that Series. Indirect or general expenses of the
Fund are allocated among and charged to the assets of each Series on a fair and
equitable basis, which may be based on the relative assets of each Series or the
nature of the services performed and relative applicability to each Series.
E. Security Transactions and Investment Income - Security transactions are
accounted for on the date the securities are purchased or sold. Cost is
determined, and gains and losses are based, on the identified cost basis
for common stocks and the amortized cost basis for Treasury STRIPS for both
financial statement and federal income tax purposes. Dividend income is recorded
on the ex-dividend date. Interest income (consisting of amortized discount) and
estimated expenses are accrued daily.
<PAGE>
2. Security Transactions - Purchases and sales of securities and long-term U.S.
Government Obligations, excluding short-term notes, were as follows:
Six Months Ended June 30, 1995 1st SERIES 2nd SERIES 3rd SERIES
Securities
Purchases............................... $ --- $ --- $ 14,800
Proceeds of sales....................... $ --- $ --- $ 27,363
Long-Term U.S. Government Obligations
Purchases............................... $ 52,320 $ 90,048 $ 35,353
Proceeds of sales....................... $ 102,262 $ 128,812 $ 38,477
At June 30, 1995, aggregate cost and net unrealized appreciation of securities
for federal income tax purposes were as follows:
1st SERIES 2nd SERIES 3rd SERIES
Aggregate cost of investments........... $ 1,052,601 $ 2,272,741 $ 990,705
Unrealized appreciation................. $ 416,751 $ 230,676 $ 99,501
Unrealized depreciation................. 650 1,025 3,741
Net unrealized appreciation............. $ 416,101 $ 229,651 $ 95,760
3. Trust Shares - The Declaration of Trust permits the Fund to issue an
unlimited number of shares of beneficial interest, of one or more Series.
4. Advisory Fee and Other Transactions With Affiliates - Certain officers and
trustees of the Fund are officers and directors of its investment adviser, First
Investors Management Company, Inc. ("FIMCO"), its underwriter, First Investors
Corporation ("FIC"), its transfer agent, Administrative Data Management Corp.
("ADM") and/or First Financial Savings Bank, S.L.A. ("FFS"), custodian of the
Fund's Individual Retirement Accounts. Officers and trustees of the Fund
received no remuneration from the Fund for serving in such capacities. Their
remuneration (together with certain other expenses of the Fund) is paid by FIMCO
or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO, an annual
fee, payable monthly, at the rate of 1% of the first $200 million of each
Series' average daily net assets, .75% on the next $300 million, declining by
.03% on each $250 million thereafter, down to .66% on average daily net assets
over $1 billion. Expenses of the 1st Series in the amount of $1,541 were
assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse a Series if
and to the extent that such Series' aggregate operating expenses, including the
advisory fee but generally excluding interest, taxes, brokerage commissions and
extraordinary expenses, exceed any limitation on expenses applicable to the
Series in those states (unless waivers of such limitations have been obtained).
The amount of any such reimbursement is limited to the yearly advisory fee for
such Series . For the six months ended June 30, 1995, no reimbursement was
required pursuant to these provisions.
For the six months ended June 30, 1995, shareholder servicing costs included
$3,568 in fees paid to ADM and $2,223 in custodian fees paid to FFS.
<PAGE>
Financial Highlights
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
<TABLE>
<CAPTION>
The following table sets forth the per share operating performance data for a share outstanding, total return, ratios to
average net assets and other supplemental data for each period indicated.
P E R S H A R E D A T A
Income from Investment Operations Less Distributions from
Net Net
Asset Value Net Realized Asset Value
Net and Unrealized Total from Net Net
Beginning Investment Gain (Loss) on Investment Investment Realized Capital Total End
of Period Income Investments Operations Income Gains Surplus Distributions of Period
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1st SERIES
1990 $ 11.45 $ .707 $ (.587) $ .120 $ .707 $ .409 $ .024 $ 1.140 $ 10.43
1991 10.43 .686 1.670 2.356 .686 .270 --- .956 11.83
1992 11.83 .715 .042 .757 .715 .532 --- 1.247 11.34
1993 11.34 .670 1.535 2.205 .670 .525 --- 1.195 12.35
1994 12.35 .690 (2.035) (1.345) .690 .484 .001 1.175 9.83
1/1/95 to
6/30/95 9.83 .325 1.465 1.790 --- --- --- --- 11.62
2nd SERIES
1990 10.21 .706 (.296) .410 .706 --- .004 .710 9.91
1991 9.91 .663 1.240 1.903 .663 --- --- .663 11.15
1992 11.15 .656 .130 .786 .656 --- --- .656 11.28
1993 11.28 .643 .770 1.413 .643 --- --- .643 12.05
1994 12.05 .660 (1.484) (.824) .660 --- .006 .666 10.56
1/1/95 to
6/30/95 10.56 .313 .807 1.120 --- --- --- --- 11.68
3rd SERIES
1990 10.16 .598 (.308) .290 .598 --- .012 .610 9.84
1991 9.84 .676 1.211 1.887 .676 --- .001 .677 11.05
1992 11.05 .576 .120 .696 .576 --- --- .576 11.17
1993 11.17 .544 1.110 1.654 .544 --- --- .544 12.28
1994 12.28 .610 (1.307) (.697) .610 --- .013 .623 10.96
1/1/95 to
6/30/95 10.96 .282 .878 1.160 --- --- --- --- 12.12
R A T I O S / S U P P L E M E N T A L D A T A
<CAPTION>
Ratio to Average Net Assets
Net Portfolio
Total Net Assets Investment Turnover
Return++ End of Period Expenses Income Rate
(%) (in thousands) (%) (%) (%)
<S> <C> <C> <C> <C> <C>
1st SERIES
1990 1.05 $ 1,591 1.90 6.16 14
1991 22.59 1,758 1.86 5.95 8
1992 6.40 1,599 1.75 5.62 8
1993 19.44 1,732 1.59* 4.94* 7
1994 (10.90) 1,330 1.60* 5.73* 8
1/1/95 to
6/30/95 18.21 1,474 1.60*+ 5.87*+ 4
2nd SERIES
1990 4.02 2,943 1.88 6.46 12
1991 19.20 2,946 1.91 5.87 8
1992 7.05 2,784 1.77 5.46 7
1993 12.53 2,756 1.70 4.93 7
1994 (6.89) 2,360 1.78 5.48 8
1/1/95 to
6/30/95 10.61 2,519 1.86+ 5.51+ 4
3rd SERIES
1990 2.85 1,777 1.74 5.53 20
1991 19.18 1,355 1.83 5.17 11
1992 6.30 1,185 1.88 4.61 8
1993 14.81 1,258 1.68 4.27 11
1994 (5.78) 1,032 1.74 4.77 10
1/1/95 to
6/30/95 10.58 1,125 1.77+ 4.81+ 5
</TABLE>
+Annualized
++Calculated without sales charges
*For the years 1993 and 1994 and the six months ended June 30, 1995,
the investment adviser assumed expenses of $2,744, $2,594 and
$1,541, respectively. The ratios of expenses and net investment
income to average net assets before the assumption of these
expenses were as follows:
1/1/95 to
1993 1994 6/30/95
Expenses 1.75% 1.78% 1.82%
Net investment income 4.79% 5.56% 5.65%
See notes to financial statements
<PAGE>
Independent Auditor's Report
To the Shareholders and Trustees of
First Investors U.S. Government Plus Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the 1st, 2nd and 3rd Series of First Investors
U.S. Government Plus Fund as of June 30, 1995, and the related statement of
operations for the six months then ended, the statement of changes in net assets
for the six months ended June 30, 1995 and the year ended December 31, 1994, and
the financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
1st, 2nd and 3rd Series of First Investors U.S. Government Plus Fund as of June
30, 1995, and the results of their operations, changes in their net assets and
the financial highlights for each of the respective periods indicated thereon,
in conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
July 31, 1995
<PAGE>
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Trustees Shareholder Information
James J. Coy Investment Adviser
First Investors
Roger L. Grayson Management Company, Inc.
95 Wall Street
Glenn O. Head New York, NY 10005
Kathryn S. Head Underwriter
First Investors Corporation
F. William Ortman, Jr. 95 Wall Street
New York, NY 10005
Rex R. Reed
Custodian
Herbert Rubinstein The Bank of New York
48 Wall Street
James M. Srygley New York, NY 10286
John T. Sullivan Transfer Agent
Administrative Data
Robert F. Wentworth Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Officers
Glenn O. Head Kirkpatrick & Lockhart LLP
President 1800 M Street, N.W.
Washington, DC 20036
Concetta Durso
Vice President and Secretary Auditors
Tait, Weller & Baker
Patricia D. Poitra Two Penn Center Plaza
Vice President Philadelphia, PA 19102
Joseph I. Benedek It is the Fund's practice to mail
Treasurer only one copy of its annual and
semi-annual reports to any address at
Carol Lerner Brown which more than one shareholder with
Assistant Secretary the same last name has indicated that
mail is to be delivered. Additional
copies of the reports will be mailed
if requested by any shareholder in
writing or by calling 800-423-4026.
The Fund will ensure that separate
reports are sent to any shareholder
who subsequently changes his or her
mailing address.
This report is authorized for
distribution only to existing
shareholders, and, if given to
prospective shareholders, must be
accompanied or preceded by the Fund's
prospectus.
